So far, 2016 has been a year of surprises; Toblerone, Brexit and Trump.
There has been much ink spilt and time spent analysing the effect of Brexit on the UK’s property market. But what about Trump? How will the election of Donald J. Trump influence the UK’s housing sector?
Whilst Trump has built his whole campaign on the basis of “America First” combined with a hostile attitude towards free trade deals, he will, nevertheless, need trade partners.
Trump has been vocal in his criticism of the North American Free Trade Agreement, branding it as the “worst deal ever”, opening up space for new deals to be made. While President Obama told Britain that we would be at the “back of the queue” if we left the European Union, Trump emphasised that, under his presidency, the UK would certainly not be.
Broadly speaking, America’s new president-elect is a fan of Britain. He shared his enthusiasm for the EU referendum result calling it “a great victory”, aims to build the finest golf course in the world in Scotland and took Nigel Farage on his campaign tour (and may or may not use him as an intermediary between himself and the British Government).
Estate agents and market analysts have spent the hours following the election result expressing their nervousness over the repercussions of Trump’s victory. However, some believe that an indirect consequence of the shock result may be an influx of American buyers to London – and possibly some moving here permanently as a result of Trump’s policies.
“We’re likely to see a further period of uncertainty because [Trump] will not be able to take any decisive action until he assumes power in mid-January” warns Jeremy Leaf, north London estate agent and former chairman of the Royal Institution of Chartered Surveyors’ residential faculty.
“The knock-on effect on Sterling and the FTSE inevitably has an impact on confidence here at a time when we’re already nervously anticipating the fall-out from Brexit. At the very least it looks like we will have fewer transactions, tighter lending criteria, less housebuilding and higher rents – which is exactly the opposite of what we’re looking for at the moment”, warns Leaf.
However, it is clear many agents believe there is an opportunity for the struggling prime central London market to exploit the result and Carter Jonas claims it was contacted by many wary Americans in the build-up to the poll:
“Keen to shelter from any ensuing political and economic upset, a number of buyers registered with us in advance during the presidential campaign, with a view to progressing their purchase following a Trump victory”.
Jean Liggett, Ohio-born chief executive of the UK’s Properties Of The World, says Trump’s success may lead to significant stock market destabilisation, but that London’s housing market may benefit:”Investors [may] seek to migrate their portfolios from the US to a more secure and predictable market – the UK. This may even mean that the Sterling could rise in value”.
There is of course nothing predictable about the President-elect and so only time will tell how his polices will affect the UK property market. But it is not all doom and gloom – Trump as President could be an early Christmas present for Britain’s housing sector.
City Hall likely to scrap viability assessments above fixed affordable rate – James Murray
City Hall is working up plans to scrap viability assessments for developments that meet a fixed affordable housing percentage of around 35%, London’s deputy mayor for housing has confirmed.
The fixed rate would be voluntary, but the scheme will give developers who surpass the threshold “greater certainty” over planning permission, James Murray said at the London Property Summit on Thursday afternoon.
“If we can offer people certainty by saying: ‘If you meet a fixed amount you can go through without all the hassle of viability’, that could offer a really good option,” he said.